Insurance players lash out at reforms
Lowering commissions on insurance policies could lead to hundreds of agents leaving the profession, according to Bar Kochva Ben-Giora, CEO of The Israel Phoenix Assurance Company.
Lowering commissions on insurance policies could lead to hundreds of agents leaving the profession, according to Bar Kochva Ben-Giora, CEO of The Israel Phoenix Assurance Company. Many senior players in the insurance companies have issued similar warnings, in the face of a reform that the Finance Ministry is considering in the sector.
The treasury proposes to slash insurance agents' commissions on life insurance policies by 50 percent. Several people in the industry believe that should this be implemented, many agents will leave, and the insurance firms will be forced to take on salaried sales staff.
Currently, their policies are sold via self-employed, independent agents, who market products from various companies. Selling through salaried staffers could mean the consumer is proffered less choice.
According to Ben-Giora, those agents with annual premiums of less than NIS 1.5 million will not be able to survive the lower commissions.
Head of the Insurance Agents Association Yossi Manor defended the agent. "There is no alternative to the insurance agent in marketing products," he said. "If there were an alternative, there would have started applying it a long time ago. Neither in Israel, nor anywhere in the world is there a substitute for the agent... Not every insurance sale is to a plant with hundreds of workers. Someone has to go to the small businesses too - the garage with four workers, the hairdresser with a handful of stylists."
In attacking the treasury's plans, Manor dismissed the 50-percent cut as "media spin." He failed to see why the Finance Ministry had set January 1, 2004, as a sacred date, but concluded that "the matter is not yet closed."